The Charlotte Observer won the 1988 Pulitzer Prize for meritorious public service Thursday for revealing misuse of funds by Jim and Tammy Bakker’s PTL television ministry.

It was the second time in the 1980s that The Observer won the Pulitzer competition gold medal for public service, newspaper journalism’s highest honor.

During 1987, The Observer published more than 600 stories about PTL, led by reporter Charles E. Shepard. On March 20, 1987, Shepard reported Jim Bakker’s resignation from his ministry near Fort Mill, S.C. Bakker acknowledged a 1980 sexual encounter with Jessica Hahn and the payment of money to Hahn to cover it up. Subsequent Observer revelations about financial abuses at PTL led to national scrutiny of television evangelists and a reduction in contributions to their ministries.

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Longtime Observer editorial cartoonist Doug Marlette, who now works for the Atlanta Constitution, also won a Pulitzer, for work he did at both newspapers. Thursday, as the 3 p.m. announcement of Pulitzer winners approached, Observer staff members stopped typing at computer terminals and put down their telephones to await the news. They climbed onto desks and leaned over terminals in anticipation. At 2:50 p.m., assistant managing editor Bob De Piante called New York’s Columbia University School of Journalism, which gives Pulitzer prizes in 14 categories each year, to find out if The Observer was among the winners. At precisely 3 p.m., De Piante confirmed what everyone was expecting, and his voice was drowned in cheers and applause. Shepard raised clenched fists in joy and kissed his wife, Observer reporter Jody Jaffe. Shepard also hugged his mother, Jo Shepard, who surprised him by flying in from New Haven, Conn., for the occasion. Ken Friedlein, Shepard’s editor in 1987, hugged Jeannie Falknor, who directed earlier PTL coverage. Observer Editor Rich Oppel sat several feet away, beaming proudly. The Observer won the 1981 public service prize for its series “Brown Lung: A Case of Deadly Neglect, “ a report on the cotton dust then breathed daily by more than 100,000 textile workers in the Carolinas. Observer artist Gene Payne also won a Pulitzer Prize for editorial cartooning, in 1968. The public service award is always given to a newspaper rather than an individual. All Pulitzers except the public service award carry a prize of $3,000; The Observer will receive a gold medal. Thursday, as the cheers died down in the newsroom, Managing Editor Mark Ethridge III stepped forward to praise Shepard’s “relentless efforts.” Ethridge also emphasized that The Observer’s PTL coverage involved more than two dozen staff members. “All I really want to do is say thank you to you, Charlie, and to all the rest of you.... Thank you for giving us one of the greatest moments of our lives, “ Ethridge said. Shepard congratulated his fellow reporters and editors. “I think you guys are co-winners here, “ he said. Editor Oppel recalled the difficulty of Shepard’s task - weighing conflicting bits of information to determine the truth. “The reporter’s task is one of awesome responsibility, “ Oppel said. “This is a shining example of the craft.” The Observer first began coverage of the Bakkers a decade ago. After Bakker’s resignation, Shepard’s stories identified Hahn as the woman PTL initially paid $115,000 when she complained that Bakker had sex with her in December 1980 in a Clearwater Beach, Fla., motel. Subsequent stories by Shepard focused on financial abuses at PTL under Bakker. Among them: * Additional payments included $150,000 to establish a 20-year trust fund in exchange for Hahn’s silence, an arrangement negotiated by Bakker deputy Richard Dortch. * Jim and Tammy Bakker received at least $1.6 million in the 15 months preceding their departure from PTL. The salaries, bonuses and other compensation weren’t known by some members of the PTL board. * Bakker had sold enough “Lifetime Partnerships” at $1,000 apiece to pay for the $26 million Heritage Towers hotel twice, but the 500-room hotel wasn’t finished and PTL was behind on construction payments. Last April 28, the new PTL board under the Rev. Jerry Falwell cut off Bakker’s continuing salary payments and dismissed Dortch and several key Bakker aides. Falwell’s leadership of the ministry ended with his resignation in October. A federal grand jury is investigating whether the Bakkers and several top aides commited mail, wire or tax fraud at the ministry. The grand jury probe, which began in September, is expected to last until late this year. In December, an IRS report claimed that the Bakkers received $9.36 million in excessive compensation between 1981 and 1987. PTL is attempting to reorganize under the protection of federal bankruptcy court. The ministry’s new management must raise $4.5 million by May 2, the court-imposed deadline to begin paying off $60 million in debts accrued under Bakker. Additionally, the IRS is seeking at least $55.7 million from PTL in back taxes.Previous WinnersThis is a list of Meritorious Public Service award winners:1918 New York Times1919 Milwaukee Journal1921 Boston Post1922 New York World1923 Memphis Commercial Appeal1924 New York World1926 Enquirer-Sun, Columbus, Ga.1927 Canton Daily News1928 Indianapolis Times1929 Evening World, New York1931 Atlanta Constitution1932 Indianapolis News1933 New York World-Telegram1934 Medford (Ore.) Mail-Tribune1935 Sacramento Bee1936 Cedar Rapids (Ia.) Gazette1937 St. Louis Post-Dispatch1938 Bismarck (N.D.) Tribune1939 Miami Daily News1940 Waterbury (Conn.) Republican and American1941 St. Louis Post-Dispatch1942 Los Angeles Times1943 Omaha World Herald1944 New York Times1945 Detroit Free Press1946 Scranton Times1947 Baltimore Sun1948 St. Louis Post-Dispatch1949 Nebraska State Journal1950 Chicago Daily News; St. Louis Post-Dispatch1951 Miami Herald; Brooklyn Eagle1952 St. Louis Post-Dispatch1953 Whiteville News Reporter; Tabor City Tribune1954 Newsday1955 Columbus (Ga.) Ledger and Sunday Ledger-Enquirer1956 Watsonville (Cal.) Register-Pajaronian1957 Chicago Daily News1958 Arkansas Gazette, Little Rock1959 Utica Observer-Dispatch and Utica Daily Press1960 Los Angeles Times1961 Amarillo (Tex.) Globe-Times1962 Panama City (Fla.) News-Herald1963 Chicago Daily News1964 St. Petersburg Times1965 Hutchinson (Kan.) News1966 Boston Globe1967 The Louisville Courier-Journal; The Milwaukee Journal1968 Riverside (Cal.) Press-Enterprise1969 Los Angeles Times1970 Newsday1971 Winston Salem Journal & Sentinel1972 New York Times1973 Washington Post1974 Newsday1975 Boston Globe1976 Anchorage Daily News1977 Lufkin (Tex.) News1978 Philadelphia Inquirer1979 Point Reyes (Cal.) Light1980 Gannett News Service1981 Charlotte Observer1982 Detroit News1983 Jackson (Miss.) Clarion-Ledger1984 Los Angeles Times1985 Ft. Worth Star-Telegram1986 Denver Post1987 Pittsburgh Pres